Correlation Between ACS Actividades and UNIQA Insurance

Can any of the company-specific risk be diversified away by investing in both ACS Actividades and UNIQA Insurance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ACS Actividades and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACS Actividades de and UNIQA Insurance Group, you can compare the effects of market volatilities on ACS Actividades and UNIQA Insurance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ACS Actividades with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and UNIQA Insurance.

Diversification Opportunities for ACS Actividades and UNIQA Insurance

-0.29

Correlation Coefficient

ACS Actividades  UNIQA Insurance

Very good diversification

The 3 months correlation between ACS and UNIQA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group and ACS Actividades is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ACS Actividades de are associated (or correlated) with UNIQA Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA Insurance Group has no effect on the direction of ACS Actividades i.e., ACS Actividades and UNIQA Insurance go up and down completely randomly.

Pair Corralation between ACS Actividades and UNIQA Insurance

Assuming the 90 days trading horizon ACS Actividades de is expected to generate 2.16 times more return on investment than UNIQA Insurance. However, ACS Actividades is 2.16 times more volatile than UNIQA Insurance Group. It trades about 0.52 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.13 per unit of risk. If you would invest  4,142  in ACS Actividades de on September 17, 2024 and sell it today you would earn a total of  682.00  from holding ACS Actividades de or generate 16.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ACS Actividades de  vs.  UNIQA Insurance Group

ACS Actividades de

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ACS Actividades de are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, ACS Actividades demonstrated solid returns over the last few months and may actually be approaching a breakup point.

UNIQA Insurance Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIQA Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, UNIQA Insurance is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ACS Actividades and UNIQA Insurance

The main advantage of trading using opposite ACS Actividades and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades position performs unexpectedly, UNIQA Insurance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UNIQA Insurance will offset losses from the drop in UNIQA Insurance's long position.

The idea behind ACS Actividades de and UNIQA Insurance Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.